Sunday, 12 October 2008

That Sunday evening feeling

It is another one of those weekends. The government, the BoE and the FSA are cooking up something. All day, the CEOs of our leading banks have been in negotiation over the Brown's recapitalisation scheme. There is even some talk that trading in bank shares will be suspended tomorrow to give everyone time to calm down and absorb the implications of the likely capital injection.

Two years ago, only someone with an apocalyptic imagination would have suggested that the UK banking system would need an unprecedented recapitalisation, that the Bank of England would become the interbank market, and that house prices would fall 14 percent in one year.

Well, actually, that last one always looked likely but the idea of the banking system tottering on the edge of collapse? Few of us had the imagination to think that things could get so bad.

Yet here we are, waiting for the authorities to throw the dice one last time in the hope that we can cling onto a functioning payments system. It is strange, if not a little frightening, how quickly the world can turn.

1 comment:

Nick von Mises said...

I note the talk has been about Brown jawboning the US and EU to adopt the Brown Plan.

Funny thing is, it seems an awful lot like a King Plan and the goblin king is rushing around doing what King told him needs doing.

No way in the world could that incompetent PM clown have come up with such a plan by his own judgement.